Interpretation of the Guidance note for local authorities: holiday accommodation and the Health Protection (Coronavirus Restrictions) (Wales) (Amendment) Regulations 2020
On 7th April the Welsh Assembly issued a guidance note for accommodation providers in Wales on the interpretation and implementation of The Health Protection (Coronavirus Restrictions) (Wales) Regulations 2020. These regulations came into force on 26 March 2020 and will remain in force until 26th September, although the Welsh Ministers have the power to extend the restrictions under them beyond this period.
While the Regulation do not expire until 26th September 2020, the Welsh Ministers are required to review the regulations every 21 days (the first review was on 15 April 2020) to determine whether they are appropriate for the current circumstances and, if not, to modify the regulations accordingly.
The Regulations and Accommodation Businesses
Under the Regulations, with limited exemptions, all holiday accommodation businesses are required to remain closed until further notice. They can, however, continue to provide information or services online or by telephone or post. This is to enable accommodation businesses to communicate with customers to provide information, including on potential future bookings.
The guidance states that due to the restrictions put in place by the Regulations, the Government is not able to specify any dates from which businesses could consider taking bookings without breaching the obligations to close their businesses and to keep those businesses closed and notes that businesses will not be able to honour any bookings until such time as the restrictions are lifted. As such, any bookings taken are at the businesses’ and consumers’ risk.
While that guidance is clear that bookings should not be taken to provide accommodation for any period that the businesses are required by the regulations to be closed, the guidance also states that the regulations themselves will be reviewed every 21 days. This has led to confusion within the accommodation sector as to the status of both existing bookings and accepting bookings more than 21 days in advance.
Our Interpretation of the Guidance
There are two main situations that should be considered.
If you have an existing booking that is within 21 days of the last review of the Regulations, and the restriction on the opening of holiday accommodation remains, then this booking cannot be completed and a force majeure situation exists. The outcome of this in terms of costs will depend on the terms and conditions of the contract between the two parties.
If you have an existing booking that is outside the 21 day review period, then there remains a possibility the next review of the Regulations could result in an amendment to the regulations that could allow the contract to be fulfilled. In this case, because there is a possibility that the contract could be fulfilled, if either party cancels the contract, then they are liable for the costs associated with that cancellation.
However, because there is a significant risk that the restrictions on opening will continue, we would advice businesses to contact customers who have existing bookings for the period between the next review and 26th September to inform them of the situation and agree what will happen if the booking cannot be fulfilled.
It would be counter to the regulations to take any booking for a period within 21 days of the last review of the regulations as it will be impossible to fulfil that booking.
However, we believe that it is possible for a business to take a booking for a period between 21 days of the last review and 26th September as there is the possibility that a future review of the regulations could result in an amendment that allows the business to open and fulfil the contract.
In this situation, it is important that, for the avoidance of all doubt, that there is a written agreement between the business and the customer as to what happens if the current restrictions on accommodation businesses opening remain in place and the booking cannot be fulfilled. This could be that any payment is refunded or the booking is rolled forward to a new date at no cost.
Important Note: This note outlines our interpretation of this guidance as it applies to accommodation businesses in Wales. It must be noted that does not constitute legal advice and further clarification from the Welsh Assembly may render this interpretation void as of the 20th April 2020.